"No man is above the law and no man is below it: nor do we ask any man's permission when we ask him to obey it." T.R.
Representing the voice of little people.

Thursday, March 7, 2013

Man Pleads Guilty to Federal Fraud Charges

LOS ANGELES—The CEO and co-owner of a Diamond Bar investment company
pleaded guilty this afternoon to two federal felony counts arising from
his scheme to defraud investors who put $49 million into his bogus
day-trading venture.
Syed Qaisar Madad pleaded guilty to wire fraud and tax fraud,
admitting in court today that investors lost more than $31 million when
his scheme collapsed in March 2011.
Starting in 2005, Madad collected money from investors who believed
he generated consistent, substantial profits and that their money would
be safe and available upon request. During the five-and-a-half-year life
of the scheme, Madad received more than $49 million from investors.
Madad, 66, a resident of Diamond Bar who ran his scheme through a
company called Technology for Telecommunication and Multimedia Inc.
(TTM), portrayed himself as a successful investor who had not lost money
in a single day of trading—except one day in 2006. Madad, who was
profiled and interviewed in media serving the Pakistani-American
community, told reporters and potential investors that he had developed a
day-trading technique that was always profitable.
Over the course of the scheme, Madad sent victims monthly account
statements that always showed gains in their accounts, and some victims
gave Madad additional funds based solely on these account statements.
Madad admitted today that the balances shown on these statements were
false, and that, in fact, he lost more than $15 million in unsuccessful
trading.
While Madad promised that he would not take any fees or compensation
for managing the invested funds, Madad admitted today that he spent well
over $15 million of investors’ money on personal expenses, including
real estate, jewelry for his wife and daughters, vehicles, and cash
disbursements to himself and family members.
Although Madad returned approximately $17.7 million to investors,
many of the payments he made were Ponzi payments, meaning that the money
came from funds entrusted to him by other investors, rather than from
profits or interest he had earned.
Madad also admitted today that he under-reported his income for tax
year 2009 by approximately $4.9 million on tax returns filed with the
Internal Revenue Service.
Madad’s scheme originally came to light two years ago when he was sued by one of his investors.
Prior to and following Madad’s arrest in October 2012, pursuant to
court-authorized warrants, the government seized a Mercedes-Benz C63,
numerous pieces of diamond and other precious gemstone jewelry, and
funds that were traceable to investor money. As part of his agreement
with the goverment, Madad has agreed to forfeit his Diamond Bar mansion,
the Mercedez-Benz, 68 pieces of jewelry, and other luxury items,
including silk and wool handmade oriental carpets. Madad also agreed to
pay the IRS approximately $5 million in unpaid taxes for tax years 2006
through 2010.
Madad is scheduled to be sentenced by United States District Judge
Percy Anderson on June 24. As a result of today’s guilty pleas, Madad
faces a statutory maximum sentence of 23 years in federal prison.
The case against Madad is the result of an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation